The Reserve Bank of India (RBI) has approved a restructuring plan by Tata Sons seeking a waiver for the mandatory listing of the group’s holding company on the stock exchanges, The Economic Times has reported.
Tata Sons has already implemented parts of the recast plan, including wiping off debt, the report added.
Moneycontrol couldn't independently verify the report.
The restructuring means Tata Sons will not be classified as a non-bank finance company (NBFC) in the ‘upper layer’ (UL), subject to a few regulatory conditions and hence this will imply that Tata Sons won’t be required to list itself on the stock exchanges.
The 'upper layer' refers to NBFCs that are considered systemically important and have significant interconnectedness with the financial system.
An October 2021 RBI circular said that those companies identified as NBFC-UL should be mandatorily listed within three years. The RBI had classified Tata Sons as an NBFC-UL in 2022, which would have meant a listing by September 2025 if it had not undertaken this restructuring exercise, the report added.
Also Read | Tata Sons working on restructuring plans to comply with RBI rules: Report
Tata Sons has restructured its balance sheet to be a zero-debt company to comply with the RBI rules, ET wrote.
As per a Crisil Ratings report cited by the daily, the company's net debt was at Rs 15,200 crore as on September 30, 2023 and it had standalone cash and cash equivalents of over Rs 2,500 crore.
There were no comments from the RBI or Tata Sons till ET filed the story.
"There had been much internal debate within the Tata Group, and listing was not seen as an option at all, so adhering to norms by restructuring had to be done," a company executive close to the matter told ET.
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